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Rice prices soar as Duterte marks 2nd year in office

RICE SHORTAGE. Inflation accelerates during President Rodrigo Duterte's second year, partly due to depleted rice buffer stocks of the National Food Authority (NFA). File photo of Duterte courtesy of Malacañang; NFA rice photo by Jay Directo/AFP

MANILA, Philippines – Affordable rice from the National Food Authority (NFA) finally started to arrive in local markets. Consumers could now buy NFA rice at P27 to P32 per kilo, as some 250,000 metric tons (MT) of rice from Vietnam and Thailand arrived in ports.

However, poor families already suffered for almost half of the year, as they were left with no choice but to buy regular and well-milled rice.

Data from the Philippine Statistics Authority (PSA) revealed the rapid surge of prices in both regular and well-milled rice, as the NFA rice supply started to get depleted.

The acceleration of rice prices, along with other basic commodities and oil, as well as the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, contributed to the spike in inflation, which clocked in at 4.6% in May. The figure is outside the government's annual target of 2% to 4%.

Budget Secretary Benjamin Diokno did not mince words and blamed the NFA for partly causing the surge.

(First, the price of fuel increased in the world market and we cannot control that. Second, the price of rice went higher not because of TRAIN. It was because of the incompetence of people in the NFA.)

NFA Administrator Jason Aquino responded: "The depletion of NFA rice supply was not a result of NFA's inefficiency or the incompetence of its officials. It was the consequence of a difference in views and appreciation of how the NFA mandate is supposed to be done." (READ: Who is NFA chief Jason Aquino and why is he controversial?)

The NFA chief said instead of pointing blame, all should just "help each other find the right and immediate solutions."

While rice prices are expected to stabilize within the next weeks, several questions remain: What is the root cause of the shortage? And what measures are in place to prevent it from happening again?

Turf war

TURF WAR. President Rodrigo Duterte says he clipped the powers of Cabinet Secretary Leoncio Evasco Jr because of being involved in a turf war with NFA Administrator Jason Aquino. Malacañang file photo.

Trouble in the NFA started to catch the media's attention when the turf war between Aquino and Cabinet Secretary Leoncio Evasco Jr, who then headed the NFA council, started to heat up. (TIMELINE: Clashes between Evasco and NFA's Aquino)

As early as March 2017, Evasco alerted President Rodrigo Duterte that Aquino diverted rice meant for typhoon-prone Eastern Visayas to Bulacan rice traders.

In a confidential memorandum obtained by Rappler, Evasco said Aquino sold 10.4 million kilograms of NFA rice meant for Region VIII to Bulacan rice traders for P235 million.

The deal was one reason why there was a sudden decline in NFA's buffer stock in Eastern Visayas.

While consumers' concerns are perceived to be addressed in the coming weeks due to the availability of NFA rice in the market, farmers may be the next to dive into the battle arena.

Congress is poised to pass the rice tariffication law this year. The law aims to amend the Agricultural Tariffication Act of 1996 and allow rice imports to flow in the country. The current law only allows the NFA to import rice.

Senator Villar said that allowing imports would bring down rice prices because of the tight competition. To protect local farmers, a tariff of 35% will be slapped to all rice imports.

Bantay Bigas Spokesperson Cathy Estavillo said the tariffs will not be enough and it will not be fair play for local farmers.

(Farmers will suffer under the rice tariffication law because products from Thailand and Vietnam are cheaper. There are a lot of promises that the farmers will get help, but even the irrigation problems now are not addressed.)

Villar admitted that farmers cannot compete with Vietnam because their production cost is only at P6 per kilo of palay, while the Filipino farmers produce at P12 per kilo.

For local farmers to be competitive, Villar said that she is working with the DA to push for the mechanization or use of machines in rice production and the distribution of seeds with better yield.

Meanwhile, Piñol said farmers can now easily borrow money from the agency through the DA's easy access financing program.

(We want farmers to have a sense of ownership because if we just give them seeds or a carabao, they will just sell it. But if they borrowed money for it, that won't be the case.)

NEDA said the measure would lower the cost of rice in the market to P30.30 per kilo, P4.30 lower than the domestic wholesale price of regular milled rice. – withreports from Pia Ranada, Aika Rey, and Camille Elemia/Rappler.com

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Welcome to Rappler, a social news network where stories inspire community engagement and digitally fuelled actions for social change. Rappler comes from the root words "rap" (to discuss) + "ripple" (to make waves).